Chapter 2 Strategic Use of Information ResourcesLearning ObjectivesReal World ExamplesPowerPoint PresentationEVOLUTION OF INFORMATION RESOURCESInformation ResourcesSlide 7INFORMATION RESOURCES AS STRATEGIC TOOLSSlide 9IT AssetsIT CapabilitiesSlide 12Advantages of Information ResourcesHOW CAN INFORMATION RESOURCES BE USED STRATEGICALLY?The Strategic LandscapeUsing Information Resources to Influence Competitive ForcesSlide 17Slide 18Porter’s Value Chain ModelAltering the Value ChainSlide 21The Value Chain SystemSlide 23CRM and the Value ChainSlide 25Supply Chain ManagementThe Resource-Based ViewSlide 28STRATEGIC ALLIANCESStrategic AlliancesTypes of Strategic AlliancesRISKSPotential RisksFOOD FOR THOUGHT: CO-CREATING IT AND BUSINESS STRATEGYCo-Creating IT and Business StrategySUMMARYSummaryChapter 2Strategic Use of Information ResourcesManaging and Using Information Systems: A Strategic Approachby Keri Pearlson & Carol SaundersChapter 22Learning Objectives•List the identifying factors of the eras of information usage.•Know what makes an information resource valuable.•Explain how information resources are used strategically in context of the 5-forces model.•Understand how information resources can be used to alter the value chain.•Explain the importance of strategic alliances.•Know the risks of information resources.Chapter 23Real World Examples•The Spanish manufacturer Zara has a simple business model that provides a significant strategic advantage.•Their system links demand to manufacturing and manufacturing to distribution.•Customers visit up to 17 times per year to check on new items that may have arrived.•Since products are limited customers will immediately purchase products they like.•Loyal and satisfied customer base.•Zara aligns its information system strategy with its business strategy.•The POS system sends daily updates to Zara’s headquarters.•Managers report to designers what sold and what customers wanted but couldn’t find.•The information is used to determine what to keep and what to discontinue or change.•New designs can be ordered twice a week.•The entire process is automated so that new designs and products can be created quickly.Chapter 24Chapter 25EVOLUTION OF INFORMATION RESOURCESChapter 26Information Resources•Over the past decades the use of information resources has changed.•Organizations have moved from an “efficiency model” of the 1960’s to a “value creation model” of the 2000’s.•Companies seek to utilize those technologies that give them competitive advantage.•Maximizing the effectiveness of the firm’s business strategy requires the general manager to identify and use information resources.•Figure 2.1 shows this change.Chapter 27Primary Role of ITEfficiencyAutomate existing paper-based processesEffectivenessSolve problems and create opportunitiesStrategicIncrease individual and group effectivenessStrategicTransform industry/organizationValue creationCreate collaborative partnershipsJustify IT expenditureROI Increasing productivity and decision makingCompetitivepositionCompetitivepositionAddingValueTarget of systemsOrganization Individual manager/GroupBusinessprocessesBusiness processes ecosystemCustomer,supplier,ecosystemInformation modelApplicationspecificData-driven User-driven Business-driven Knowledge-drivenDominant technologyMainframe- basedMinicomputer-basedMicrocomputer “decentralized intelligence”Client-Server “distribution intelligence”Internet “ubiquitous intelligence”1960s 1970s 1980s 1990s 2000+Basis of ValueScarcity Scarcity Scarcity Plentitude PlentitudeUnderlying economicsEconomic of information bundled w/ economics of thingsEconomic of information bundled w/ economics of thingsEconomic of information bundled w/ economics of thingsEconomic of information separated f/ economics of thingsEconomic of information separated f/ economics of thingsFigure 2.1 Eras of information usage in organizationsChapter 28INFORMATION RESOURCES AS STRATEGIC TOOLSChapter 29Information Resources•The term information resources is defined as the available data, technology, people, and processes available to perform business processes and tasks.•Information resources can be either assets or capabilities.–IT asset is anything, tangible or intangible, that can be used by a firm in its processes for creating, producing and/or offering its products (IT infrastructure is an asset).–IT capability is something that is learned or developed over time in order for the firm to create, produce or offer it products.IT Assets•IS infrastructure: –It includes data, technology, people, and processes. –The infrastructure provides the foundation for the delivery of a firm’s products or services. •Information repository. –Logically-related data that is captured, organized and retrievable by the firm.•Web 2.0 assets now include resources used but not owned by the firm (eBay, Facebook, etc.).Chapter 210IT Capabilities•Three major categories of IT capabilities: –Technical skills - applied to designing, developing and implementing information systems. –IT management skills - critical for managing the IT function and IT projects. –Relationship skills - can either be externally-focused or spanning across departments. Chapter 211Chapter 212Type of Information ResourceDefinition ExampleIT Asset Anything that can be used by a firm in its processes for creating, producing and/or offering its products (goods or services) IS infrastructure Base foundation of the IT portfolio shared through the firm3 Hardware, software, network, data components, proprietary technology, web-based services Information repository Data that is logically related and organized in a structured form accessible and able for decision making purposes.” Critical information about customers that can be used to gain strategic advantage. Much of this information is increasingly available on the web.IT Capability Something that is learned or developed over time in order for the firm to create, produce or offer it products ing IT assets Technical skill Ability applied to designing, developing and implementing information systemsProficiency in systems analysis and design; programming skills IT management skills Ability to managing IT function and IT projectsBeing knowledgeable about business processes and managing systems to support them; evaluating technology options; envisioning creative IS solutions to business